The SS&C team is reflecting on a busy time at this year’s MIPIM real estate conference and taking a deep dive into the key real estate trends to look out for throughout the rest of 2024. We observed the following themes which were poignant across the board in the current real estate market:
- The overall sentiment of the industry remains cautious, with inflation, monetary policy, geopolitical tensions and elections in major markets still causing concerns with these starting to ease somewhat.
- Some apprehension remains in the industry as a result of the continued slumping values and higher interest rates.
- The residential sector, in particular, seems to be a source of pent-up demand. Where will our growing populations live and work if nothing is being built? Diverse living concepts such as co-living and build-to-rent are being offered as solutions to housing scarcity.
- Increasing interest in ESG in the real estate industry, driven by demographic trends and urban growth, will continue to offer challenges and opportunities when working towards more liveable and sustainable cities. The various presentations at MIPIM showed that the real estate industry is taking action in this area.
- There were discussions at the INREV session around a convergence of the real estate and infrastructure sectors; in particular, data centers being driven by the growth of AI and its demands for computing power, and the logistics sector continuing to attract investor interest.
- It was acknowledged that the return to the office is continuing, with occupiers and landlords settling on "3.1 days a week"—a trend that’s particularly apparent in United Kingdom office occupancy.
- However, some signs of optimism were also apparent, with many feeling that we are now over the hump in terms of inflation, as interest and finance rates are predicted to fall.
- It will take time for investors to regain confidence, with cautious optimism and steadily growing deployable capital prompting some opportunistic investors to call the bottom of the market.
- This more positive outlook was echoed in recent announcements from Goldman Sachs, which stated that the market was now at its lowest point and, for those who can, now is potentially the perfect time to buy property.
- Given that it typically takes four to six months for deals to commence and conclude, it will be well into 2025 before equilibrium returns to the market, even if transactional volumes start to increase in the second half of this year.
How SS&C Can Help
SS&C offers a suite of comprehensive, modular real estate services to a diverse, global client base and has extensive experience supporting the needs of organizations that invest in and manage a broad range of real estate investments across the full spectrum of legal entity structures. Ownership of the entire value chain, from the technology and data centers to the processing infrastructure and personnel, provides SS&C with tremendous control over the quality of deliverables to our clients. We build, own and operate our own proprietary, advanced and scalable technology platforms, and also offer the flexibility to work in our clients’ systems. To learn more about our solutions, contact us.
References
https://www.bloomberg.com/news/articles/2024-03-12/goldman-says-european-real-estate-valuations-nearing-bottom
https://www.iceniprojects.com/reflections-from-mipim-2024-plenty-to-be-hopeful-for/
https://www.costar.com/article/1946196655/mipim-2024-a-change-in-the-air-as-real-estate-puts-its-best-foot-forward
https://www.savills.co.uk/blog/article/358018/commercial-property/the-message-from-mipim-2024--a-corner-has-been-turned-.aspx